5 minute read 28 Mar 2019
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How to read the global IPO market: Q2 2018


Martin Steinbach


Over 20 years of experience in the corporate finance field: IPO, M&A, private equity, venture capital and mezzanine finance. IPO thought leader.

5 minute read 28 Mar 2019

While IPO activity has cooled over the first half of 2018, there are reasons to be optimistic.

The general picture in the IPO market over the first half of 2018 has been of a general cooling – a natural result of the risks and uncertainties from geopolitical frictions and shifting trade policies.

These rising uncertainties contributed to declines in global IPO activity in Q2 2018, resulting in 660 IPOs in H1 2018, a 21% decrease from H1 2017. If you’d like to download the full report, please look for ‘Show resources’ on the side of the page.

Despite this slowdown, global IPO markets raised $94.3b in the first half of 2018 – a 5% year-on-year increase, and the highest proceeds for the first half of a year since H1 2015.

Furthermore, economic conditions continue to be encouraging, with equity valuations high in many parts of the world and interest rates remaining low.

As a result, we expect a resurgence in IPO activity during the second half of 2018.

The picture also becomes more complex when we examine the breakdown of IPO data over different regions. Our analysis of the quarterly numbers identified the following regional trends:

Americas IPO momentum is building

The Americas defied market volatility to have a strong H1 2018, increasing proceeds by 31% to US$35.3b and regaining the lead in regional proceeds for the first time since 2014. The NYSE and NASDAQ ranked among the top three exchanges by proceeds globally in H1 2018 and contributed heavily toward an 18% year-on-year increase in deal numbers since 2017.

Americas IPOs on the rise


increase in capital raised in the Americas

This strong momentum is largely a result of good IPO performance, especially in the US where IPOs posted average first-day returns above 10% and share price performance post-IPO exceeded broad equity indices. US IPOs accounted for 83% of volume and 85% of proceeds on Americas exchanges in H1 2018.

My colleague Jackie Kelley, EY Americas IPO Markets Leader, summarises these trends: “The second quarter of 2018 was marked by an influx of technology IPOs entering the US market. From 2013 to 2017, we saw health care companies dominate the markets in terms of deal count, but since then we’ve seen technology companies slowly gaining. Deal count and proceeds raised are up compared with last year.”

Post-IPO share price performance is solid, creating momentum heading into the second half of the year.
Jackie Kelley
EY Americas IPO and Financial Accounting Advisory Services Capital Markets Leader

Investor appetite is still high in Asia-Pacific, despite a drop in IPO activity

While investor appetite for IPOs across the Asia-Pacific region remained high, H1 2018 volumes declined 37% while proceeds were down 17% compared with H1 2017.

Asia-Pacific dominating by volume


APAC share of global IPOs

However, Asia-Pacific still accounted for a 46% share of global IPOs and 31% of global IPO proceeds in H1 2018, and five of the ten most active exchanges by deal numbers were from this region.

Overall, Q2 2018 saw sizeable gains in both volume and proceeds, increasing 75% and 202%, respectively, over Q1 2018. China’s Shanghai (SSE) exchange helped drive this by hosting Q2 2018’s largest IPO globally, coming second among exchanges by proceeds.

Japan’s IPO market has also continued to perform well in Q2 2018, with 21 IPOs raising $1.5b; $1.3b of this capital was generated by 11 technology IPOs in Q2 2018. This large increase in Q2 2018 meant that Japan finished H1 2018 with a 5% decline in volume but an 8% increase in proceeds compared with H1 2017.

“Strong macroeconomic fundamentals and investor appetite act as a counterbalance to the otherwise volatile performance of IPO activity across the region.” says Ringo Choi, my colleague at EY Asia-Pacific IPO. “Following the general declines in IPO performance in the first six months of 2018, largely resulting from recent interest rate increases, global political and economic uncertainties.”

We expect to see a rebound in the size of APAC IPO deals in the second half of 2018 as a number of mega IPOs begin to hit the market.
Ringo Choi
EY Asia-Pacific IPO Leader

European markets uncertain as India booms

In EMEIA, India was the top story. India’s IPO market continued to thrive, having the second most active exchanges by number of IPOs globally in Q2 2018. More broadly, in terms of number of deals and proceeds India’s H1 2018 IPO activity was 32% and 31% higher, respectively, than H1 2017.

EMEIA in period of caution


decline in overall EMEIA IPO deal volumes

Elsewhere in EMEIA, ongoing geopolitical uncertainty and shifting trade policies has defined H1 2018 as a period of caution. Deal volumes in H1 2018 in EMEIA declined by 4%.

However, IPO pipelines and activity remain robust behind the scenes. Deal proceeds in EMEIA rose 10% in H1 2018 compared with H1 2017. Furthermore, H1 2018 was above the EMEIA 10-year median for deal numbers and proceeds.

These rising geopolitical disruptions and trade tensions mean that EMEIA’s agenda is not entirely its own. As an export-oriented region, it relies on stable relationships with its partners for trade. Despite strong economic fundamentals and strong IPO pipeline, IPO activity levels may continue to lag until investors and issuers alike feel that market conditions are more favorable.

What to expect in H2 2018

Risks and uncertainties returned to the global IPO market in Q2 2018 as geopolitical tensions and changes in trade policies caused higher market volatility and softened IPO confidence in many parts of the world.

The good news is that economic conditions remain encouraging, equity valuations remain high in many parts of the world and interest rates remain low. As a result, we expect a resurgence in IPO activity during the second half of 2018.


While global IPO activity was generally down in the first half of 2018, several markets have individually done well – and there are indicators that activity could pick up in the second half of the year.

About this article


Martin Steinbach


Over 20 years of experience in the corporate finance field: IPO, M&A, private equity, venture capital and mezzanine finance. IPO thought leader.